Telkom appoints Morgan Stanley to advise on float

Telkom appoints Morgan Stanley to advise on float

JAKARTA (JP): State-owned PT Telekomunikasi Indonesia (Telkom) has appointed Morgan Stanley of the United States as its financial advisor to support its plan to float shares on the New York, London and Jakarta stock exchanges by the end of this year.

Telkom's president, Setyanto Santoso, said in a statement released yesterday that Morgan Stanley will advise Telkom on its long-term business and financing plans as well as on telecommunication regulatory issues.

"Morgan Stanley will also advise the company on the valuation, pricing, structuring and syndication of the global offering," he said.

Morgan Stanley is a U.S. securities company providing a wide range of financial and advisory services to major corporations, institutions and government entities as well as private investors.

Telkom announced last month that it had appointed Merrill Lynch, Goldman Sachs, both of the United States, as well as S.G. Warburg of Britain as global coordinators for its share issuance. Four local securities companies -- state-owned Danareksa, PT Makindo, PT Bahana and PT Jardine Flemming Nusantara -- were assigned to act as coordinators for the sales of its shares on the domestic exchanges.

Setyanto said yesterday that Morgan Stanley will play a role in advising Telkom and helping the company liaise with the three global coordinators and four domestic underwriters.

Director General for the Supervision of State Enterprises Martiono Hadianto said last month that the "team of seven" -- the government's special team set up to prepare the privatization of state-owned companies -- had also appointed a number of international bodies to support Telkom's public offering.

They include Arthur Andersen of the United States as the auditor and Baker & McKenzie as the legal consultant.

Telkom's public offering will include the issuance of new shares and the divestment of the government's stake. The funds to be raised from the divestment of the government's equity in Telkom will be used to prepay its high-interest foreign debts.

Telkom, which employs around 43,000 workers, recorded total assets of around Rp 7 trillion (US$3.15 billion) as of last December and a net profit of around Rp 418 billion last year.

Martiono said that the average income growth of the company reached around 20 percent in the last five years. (riz)